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What You Need to Know About Ontario HST

When & How to Charge Ontario HST


Woman trying on shoes in store
Cultura/Matelly/ Riser/ Getty Images

The Ontario HST Rate

The Harmonized Sales Tax (HST) replaced the existing provincial sales taxes and the federal goods and services tax in Ontario on July 1, 2010.

The HST is applied on most supplies of goods and services made in Ontario at a rate of 13%, consisting of the 5% federal portion and an 8% provincial portion.

Do You Need to Register for HST?

New businesses will need to register for HST unless they are Small Suppliers and choose not to (see the next section).

The Small Supplier Exception

Ontario has a Small Supplier exception in place, so if you are operating a small business that makes $30,000 or less annually, you are not required to register for or collect Ontario HST. However, you may voluntarily register your small business, enabling you to claim Input Tax Credits.

What's Exempt From HST

Consumers do not have to pay HST on items that were formerly exempt from PST such as groceries, child care, tutoring, prescription drugs and most financial services.

Nor do consumers have to pay the provincial portion of the HST tax on goods such as books (including audio books), feminine hygiene products, and children’s clothing, including footwear.

See Tax Benefits for Consumers for a complete list.

Charging HST

Generally, whether or not you charge HST on goods or services you provide depends on the place of supply. Specific rules apply to determine whether a supply is made in or outside of a participating province.

While no changes were proposed to the existing place of supply rules for supplies of tangible personal property and real property, the place of supply rules for supplies of intangible personal property and for services changed considerably with the introduction of HST.

Follow these links for details:

Point-of-Sale Rebates

Merchants must provide point-of-sale rebates of the provincial part of the Ontario HST payable on sales of certain designated items; in Ontario these items are books (including audio books), children's items, feminine hygiene products, and newspapers and qualifying foods and beverages.

Giving a point-of-sale rebate involves automatically crediting the provincial part of the HST and only collecting the 5% federal part of the HST payable on the sale of that item. Point-of-sale rebates will not affect your ability to claim Input Tax Credits on your business inputs.

See the Canada Revenue Agency's Point-of-sale rebates for Ontario and British Columbia (BC) for details.

Invoice Requirements

Just as with the GST, there are particular pieces of information you have to have on your invoices (and your receipts, contracts, or other business papers) to inform your customers how much tax they are being charged and so that they have the documentation they need to claim Input Tax Credits (ITCs). You can review what information is required in my article Invoice Sample With HST or in the Canada Revenue Agency's RC4022: General Information for GST/HST Registrants.

Government Help

Some services that did not have to have PST charged on them before now have to charge HST. To know the details about how to tell when to charge HST or just GST, the Canada Revenue Agency's Harmonized Sales Tax: Place of supply rules for determining whether a supply is made in a province (GST/HST Technical Bulletin B-103) is especially useful. It explains how to apply HST to tangible and intangible personal property, real property and services and is studded with examples.

The Canada Revenue Agency's HST for Ontario and British Columbia presents much more information about the application of GST/HST.

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